In this article, we shall discuss the 5 best alternative energy stocks to buy now. To read our detailed analysis of the alternative energy sector in 2023, go directly and see 13 Best Alternative Energy Stocks To Buy Now.
5. Enphase Energy Inc. (NASDAQ:ENPH)
Hedge Fund Holdings: 50
Based in Fremont, California, Enphase Energy Inc. (NASDAQ:ENPH) is an American energy technology company which produces and manufactures solar micro-inverters, battery energy storage, and EV charging stations. The company beat EPS estimates of $1.25 by $0.22, posting earnings of $1.47 per share in Q2 2023.
On October 5, Keybanc analysts lowered the price target on Enphase Energy Inc. (NASDAQ:ENPH) to $148 from $200, and maintained an Overweight rating on the shares. According to the analysts, despite the recent depreciation in stock valuation, the company is projected to see increased demand and enhanced profitability in the future. The current decline is merely due to broad economic headwinds, skyrocketing inflation rates, rising mortgages, and other transitory factors. However, Enphase Energy’s (NASDAQ:ENPH) estimates have consistently outperformed expectations, and its revenues are estimated to continue rising with double-digit growth in the coming quarters. Furthermore, the stock is incredibly cheap, trading at a forward P/E ratio well below 30 as of October 21.
4. First Solar Inc. (NASDAQ:FSLR)
Hedge Fund Holdings: 51
Based in Tempe, Arizona, First Solar Inc. (NASDAQ:FSLR) is an American energy company which focuses on the manufacture of solar panels, and provides utility-scale PV power plants. Investor interest around First Solar Inc. (NASDAQ:FSLR) has skyrocketed in Q2 2023, with 51 hedge funds having stakes in the company. This is significantly up from Q1 2023, when 39 hedge funds were long the stock.
On October 19, JPMorgan analysts upgraded First Solar Inc. (NASDAQ:FSLR) from Neutral to Overweight, and lowered the price target on the shares to $185 from $330. On October 12, Barclays had also upgraded the stock to Overweight from Equal-Weight with a $224 price target. This was largely due the company’s rising visibility among utility-scale and clean energy peers. According to the analysts, the stock’s recent pullback in Q2 2023 skews the risk-reward ratio in its favor, especially since the company has the best visibility into medium-term growth prospects. Although there are longer term risks, First Solar Inc. (NASDAQ:FSLR) boasts enormous near-term value, especially considering the overall solar industry has traded down due to skyrocketing inflation, and concerns over developer cost and access to capital.
3. NextEra Energy Inc. (NYSE:NEE)
Hedge Fund Holdings: 59
Based in Juno Beach, Florida, NextEra Energy Inc. (NYSE:NEE) is an American energy company. It is the largest electric utilities holding company in the world by overall market capitalization. As of 2022, more than 60% of NextEra’s (NYSE:NEE) generating capacity was from clean energy sources. In Q2 2022, the company beat EPS estimates of $0.82 by $0.06, generating earnings of $0.88 per share.
On October 9, Guggenheim analysts lowered the price target on NextEra Energy Inc. (NYSE:NEE) shares from $73 to $65, and maintained a Buy rating on the stock. According to the analyst, although the stock has shown some vulnerability in September 2023 in the face of skyrocketing interest rates, investors need to understand that the risks are purely transitory. Since the fluctuation, the valuation has normalized, making for a lucrative investment opportunity. The company has strong fundamentals and an impressive portfolio. Hedge fund sentiment around NextEra Energy Inc. (NYSE:NEE) has remained the same in Q1 and Q2 of 2023, with 51 funds long the stock.
2. General Electric Co. (NYSE:GE)
Hedge Fund Holdings: 71
Based in Boston, Massachusetts, General Electric Company (NYSE:GE) is an American multinational conglomerate which is spread across multiple divisions. On October 10, Deutsche Bank initiated coverage on General Electric Company (NYSE:GE) with a Buy rating and a $141 price target. According to the analysts, the company boasts a catalyst-rich outlook, deep resistance to transitory macroeconomic headwinds, and a capable and competent management team. Furthermore, General Electric Company (NYSE:GE) has an incredibly promising long-term aerospace outlook and a strong free-cash-flow conversion. As the company is also ready to initiate its energy business called GE Vernova, Deutsche Bank values Vernova with an enterprise value-to-EBITDA multiple of eight times.
1. Tesla Inc. (NASDAQ:TSLA)
Hedge Fund Holdings: 79
Based in Austin, Texas, Tesla Inc. (NASDAQ:TSLA) is an American multinational automotive and clean energy company which manufactures electric vehicles, stationary battery storage devices from home to grid-scale, solar panels, and other related products. On October 19, RBC analyst Tom Narayan lowered the price target on Tesla Inc. (NASDAQ:TSLA) to $301 from $305, and sustained a Buy rating on the shares. The analyst pointed to the drop in Tesla’s (NASDAQ:TSLA) stock price post a disappointing Q3 earnings announcement, saying that margin compression is transitory and investors need to capitalize on the stock’s low valuation. Narayan maintained that the margin compression is due to price cuts, rising inflation, and high borrowing costs which have dented the company’s bottom-line. However, as the economy rebounds, Tesla’s (NASDAQ:TSLA) fundamental backdrop is projected to improve, leading to an eventual surge in share valuation. The $220-200 range is an incredibly promising long-term entry level for Tesla Inc. (NASDAQ:TSLA).
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